Opinion of Mr Advocate General Van Gerven delivered on 7 March 1989

1 Original language: Dutch

2 Member Stales also ask the Commission to inmate such an investigation procedure (Article 4(1) of Regulation No 2641/84) In addition, a second procedural avenue is also open to them (see Anide 1(b). as compared with Article 1(a). of Regulation No 2641/84)

3 This difference is reflected in the wording of the regulation: Article 3(5) states, with regard to the assessment of evidence, Where it becomes apparent...; Article 6(1) provides, as regards the twofold assessment of the evidence and the interests of the Community, ;where... it is apparent to the Commission (Dutch version: wanneer de Commissie... van mening is dat = where the Commission is of the opinion that... ) (emphasis added).

4 Furthermore, in its defence the Commission expresses a reservation with regard to the admissibility of the applicant's application for reasons connected with Fediol's action for annulment in Case 187/85 which was then still pending before the Court and in which, as has already been mentioned (section I), the same practices were at issue but seen from another viewpoint (see the Repon for the Hearing, section 20). In the mean lime the Court has delivered its judgment and the Commission has dropped its reservation (see also the following footnote). In its defence, the Commission also cast doubt on Fediol's interest in bringing proceedings on the basis of rumours that Argentina had since abandoned the practices complained of. Those rumours turn out to have been wrong, as the Commission admitted at the hearing.

5 Council Régulation (EEC) No 2176/84 of 23 July 1984 on protection against dumped or subsidized exports from countries not members of the European Economic Community. Dumping and subsidization are also covered by the definition of illicit commercial practices but under Community law may be challenged only under Regulation No 2176/84. This is because Article 13 of Regulation No 2641/84 provides that Regulation No 2641/84 is not to apply in cases covered by other existing rules in the common commercial policy field. In its judgment of 14 July 1988 in Case 187/85 Fediol [1988] ECR 4155, the Court decided, as has been pointed out in section 1, that the Argentine practices challenged by Fediol could not be described as subsidization within the meaning of Regulation No 2176/84. In this case It can therefore be considered whether the practices at issue are to be categorized as illicit commercial practices within the meaning of Regulation No 2641/84.

6 OJ 1988, L 209, p. 1

7 Anicie 16(1) and (6) of the Agreement on the Implementation of Article VI of the GATT (revised Anti-Dumping Code) and Article 1 and Article 19(1) and (5) of the Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the GATT (relating to subsidies and countervailing duties) put the signatories to the agreements under a duty to adjust their domestic legislative and administrative procedures to suit the provisions of the agreements. See the preamble to Regulation No 2176/84 (OJ 1984, L 201, p. 1).

8 For more details of the background see, inter alia, M. Bronckers, Selective safeguard measures in multilateral trade relations. The Hague, 1985, pp. 211 to 219.

9 Within the compass of this case I do noi need to consider the question whether GATT provisions have direct effect (in the sense of their being capable of being invoked by individuals) since, as is argued later, the Court's power of interpretation is not dependent on the intended effect (nor on tne direct applicability) in the domestic legal order of the provision to be interpreted. For the sake of a proper understanding of my train of thought I shall nevertheless clarify my conception in this regara. I shall start from the difference between (direct and indirect) applicability, on the one hand, and direct effect in the sense referred to above, on the other, of foreign (see later) or international provisions. A provision is directly applicable where it forms a part of the domestic legal order directly without the need for transposition (an example is those GATT provisions which, according to the Court, bind the Community and form an integral part of the Community legal order); a provision is indirectly applicable where it must be declared to be applicable by means of a provision of one's own legal order (an example is a provision of foreign law which is declared to be applicable in a limited way by a rule of private international law, in particular to govern an element of a particular legal relationship: see also section 12). This must be differentiated from direct effect, which means that individuals can derive from a provision with such effect subjective rights. Direct effect is dependent primarily on the type and purpose of the relevant provision itself (hence, according to the Court, on the basis of their spirit, general scheme and terms, GATT provisions do not have direct effect, that is to say the GATT does not have provisions which can be invoked by individuals). Such a provision which does not have direct effect per se may, in my view, none the less be transformed within a particular legal order, by a rule of that legal order, into a rule having direct effect, that is say a rule which can be invoked by individuals (for instance, GATT provisions which are taken over in a Community regulation or to which a Community regulation refers and from which individuals may therefore to a greater or lesser extent derive rights pursuant to and within the limits of that regulation; this is also true of a provision of foreign law which, through a rule of private international law, is occasionally declared to be applicable within one's own legal system and made capable of being directly invoked in that context). I would add that, Ín my view, any international or foreign provision which is directly applicable or is made applicable by transposition obtains ipso facto within that legal order a certain direct effect in the sense that it can be invoked by individuals in any event as an interpretative criterion but also, it appears to me, as a criteria for assessing the validity of inferior norms or measures.

10 For a brief discussion of Anicie 31 et seq. of the Treaty of Vienna, see in particular D. Carreau, Droit international, Paris, 1986, Nos 363 to 379, especially Nos 363 and 372 and 373.

11 This applies in particular to the GATT in view of the generally accepted tradition in connection with that agreement of the settlement of disputes by means of consensus between the parties. (See in that regard Article 10 of Regulation No 2641/84, considered in section 15, infra.)

12 See E. U. Petersmann, Application of GATT by the Court of Justice of the European Communities, CMLR, 1983, pp. 397 to 437, especially pp. 403 and 404 and 417 to 420; M. Maresceau, The GATT in the case-law of the European Communities, in The European Community and GATT, M. Hilf, F. Jacobs and E. U. Petersmann, eds, 1986, pp. 107 to 126, especially pp. 113 and 117; C. D. Ehlermann, Application of GATT rules in the European Community, in The European Community and GATT, op. cit., pp. 127 to 140, especially p. 136.

13 It follows that there is yet another difference between the two regulations, namely with regard to the measures which are ultimately taken if a decision to that effect is taken at the end of tne investigation procedure. Under Regulation No 2641/84 regard is had once again to the necessity for action in the interests of the Community (Article 10(1)) and the compatibility of any measure taken with existing international obligations and procedures (Article 10(2) and (3)). Regulation No 2176/84 is a good deal more resolute: where dumping or subsidization has caused injury and the interests of the Community call for Community intervention a definitive antidumping duty or countervailing duty shall be imposed by the Council ... (Article 12(1)).

14 The Commission seems to see the complainant's right under Regulation No 2641/84 as a species of diplomatic protection. In international law (which is where this legal concept originates) it is generally assumed that an authority or a State which is asked to grant diplomatic protection is not under a duty to agree to that request. The right of a legal subject applying to the authority for diplomatic protection goes no further than the right to ask the authority for assistance. The authority is entitled to weigh the relative importance of the particular claim against the political implications connected with possible action on its part.

15 Before the amendment of the Act in 1988 the authority to act under Section 301 was vested in the President. In 1988 the authority was transferred from the President to the USTR. In 1962 the office of the USTR was created by Congress in order to take over the role of the State Department in respect of negotiations concerning trade matters because it was feared that the State Department might sacrifice trade interests to the political interests of the United States. The USTR is appointed by the President but the appointment must be ratified by Congress. He is answerable both to Congress and to the President.

16 Unreasonable practices also include for example the denial to workers of their right of association or of collective bargaining or the imposition of particular working conditions (see indent B(iii) of Section 301(d)(3) of the Act).

17 See inter alia Señale Report No 1298 with the original text of the Trade Act of 1974, published in US Code Cong. Se Adm. News 7186 (1974). See also P. Hansen, Denning unreasonableness in international trade: Section 301 of the Trade Act of 1974, Yale Law Journal, 1987, pp. 1122 to 1146, note 36 on p. 1129; Hilf, International trade disputes and the individual: Private party involvement in national and international procedures involving unfair foreign trade practices, Außenwirtschaft, 1986, p. 441 el seq., at p. 458.

18 The 1984 statute inserted a super 301 Section which was intended to put the USTR under a duly to initiate an investigation with regard to priority practices and priority foreign countries (those expressions refer to existing barriers whose diminution would particularly benefit US exporters) which are identified in the report of the annual National Trade Estimate. In addition, the statute lays down a number of accelerated procedures for foreign countries that deny adequate and effective protection of intellectual property rights or fair and equitable market access to US persons who rely upon intellectual property protection.

19 I would express no opinion as to whether or not such national legislation is compatible with the free-trade principles which underlie the GATT and authorize the taking of unilateral action against the practices of a party to the GATT only where those practices conflict with international law. The European Commission has been critical of Section 301 for those reasons, since it sees in the condemnation of behaviour which is lawful yet unreasonable a departure from the spirit of the GATT. See the references in R. Denton, The new commercial policy instrument and Akzo v Dupont, European Law Review, 1988, p. 3, at p. 4.

20 That limitation to illicit commercial practices and the resultant divergence from Section 301 of the US Trade Act was the result of a deliberate choice (see the references in Bronckers, op. cit., pp. 213 to 19, and in Denton, article cited above, pp. 5 and 6).

21 The case-law of the Court of Justice in relation to the review of the legality of economic policy in mixedeconomy systems, Legal issues of European integration, 1982/1, p. 5 et seq.

22 In considering the GATT provisions relied on I have consulted the following sources: the text of the GATT, the notes on the interpretation of the agreement, the panel reportsdrawn up by the GATT contracting parties and, as a supplementary source, academic writings.

23 The expression used by the French version of the GATT, which along with the English version constitute the authentic versions of the Agreement, is taxes intérieures.

24 It refers to the Court's judgment of 29 June 1978 in Case 140/77 Statens Kontrol Larsen [1978] ECR 1543.

25 According to Anicie 32 of the Vienna Convention (section 13 above) preparatory work is merely a supplementary and limited means of interpretation.

26 Judgment of 26 October 1982 in Case 104/81 Hauptzollami Mainz v Kupferberg [1982] ECR 3641, paragraph 30, which refers to the judgment of 9 February 1982 in Case 270/80 Polydorv Harlequin Record Shops [1982] ECR 329, paragraph 18.

27 For those (wo arguments, sec section 23 and footnotes 22 and 23

28 The applicant maintains that those statistics do not contradict its view In its opinion, the increase in Argentine exports of soya beans to the Community reflects the substantial rise in soya bean production (since 1980) coupled with a slower increase in the processing capacity of the Argentine industry The statistics therefore reflect a temporary situation which will disappear once production capacity reaches an adequate level

29 Sec inter alia the Panel Report on the EEC programme of minimum import prices, licences and surety deposits, adopted on 18 October 1978. Sec the Analytical index (loose-leafed GATT edition, Geneva) under Article XI, point 4.

30 The applicant has not cited any precedent or academic writings in support of its argument 1 would refer, inasmuch as it is necessary, to the notes, decisions and declarations connected with Article XX of the GATT which arc set out in the Analytical Index, cued earlier Nowhere therein is there any support to be found for the applicant's argument

31 See on this subject the Analytical Index. Article XXIII, point I 11(a)

32 I shall not dwell here on the thorny question to which extent such a Commission decision, with involvement (in fact a right of veto) of the Council, is subject to judicial review. What is actually involved is an acte de gouvernement in the full sense of the expression, in the international sphere in relation (not to the interpretation but) to the implementation of machinery set up by an international treaty.

33 The applicant considers that the Court should examine all grounds which were raised before the Commission's decision became definitive Thai reasoning appears to be wrong in the context of these proceedings The case turns on whether the Commission correctly judged that, at the time when it took us contested decision, there was not sufficient evidence to justify initiating an investigation (Article 3 of Regulation No 2641/84) It goes without saying that evidence that was not under assessment at that time could not be taken into consideration by the Commission (whilst an infringement of Article XVI manifestly emerged from the evidence set out in the complaint, for a different view, sec the following note)

34 Admittedly the applicant argues that Article XVI of the GATT does not relate only to subsidies but also to any form of income or price support (see Article XVI(1)) However, it is clear from the wording of Article XVI that a form of subsidization is meant thereby